Discuss one risk involved with peers decisions

Assignment Help Finance Basics
Reference no: EM131879785

Assume you have $12,000 in cash. You can deposit it today in a mutual fund earning 8.2% semiannually, or you can wait, enjoy some of it, and invest $11,000 in your brother's business in two years. Your brother is promising you a return of at least 10% on your investment. Regardless of the investment option you choose, you will have to cash in at the end of 10 years. Assume your brother is trustworthy and that both investments carry the same risk. Which investment option will you choose and why? Justify your answer using time value of money calculations and concepts.

In your response posts, identify and discuss one risk involved with your peers' decisions. Provide one argument to convince your peers to make the other choice.

Reference no: EM131879785

Questions Cloud

Determining the total retirement savings : Whats the best way to go by answering this question with instructions. You have exactly 28 years until retirement.
Discuss the costs and benefits of hydrogen fuel cells : Discuss the costs and benefits of hydrogen fuel cells. Explain how wind turbines convert kinetic energy into electrical energy.
Discuss examples of roles you would separate and why : Discuss examples of roles you would separate and why. Submit a summary of your learning as a bulleted list that explains importance of separation of duties.
What is the price of the bond : A bond with 21 years until maturity has a coupon rate of 7.6 percent and a yield to maturity of 6.2 percent. What is the price of the bond?
Discuss one risk involved with peers decisions : In your response posts, identify and discuss one risk involved with your peers' decisions. Provide one argument to convince your peers to make the other choice.
What account balance would katerina : What account balance would Katerina have at the end of the fifth year if she left all the interest paid on deposit in each bank
What is the bond price of haswell enterprises : Haswell Enterprises' bonds have a 12-year maturity, a 8.00% semiannual coupon, and a par value of $1,000. The going interest rate is 7.00%,
Describe the benefits and risks of national health insurance : Discuss why the current health care system is in turmoil. Identify two major problems of health care and analyze the impact of each of the chosen problems.
Estimate of the stock current market value : The required return on this low-risk stock is 10.00%. What is the best estimate of the stock's current market value?

Reviews

Write a Review

Finance Basics Questions & Answers

  The goal of financial management is to increase the

The goal of financial management is to increase the

  What is the relative tax advantage of corporate debt if the

what is the relative tax advantage of corporate debt if the corporate tax rate is tc .35 the personal tax rate is tp

  Calculate current ratio inventory turnover receivables

Compute the following: (It is not necessary to use averages for any balance sheet figures involved.) (a) Current ratio (b) Inventory turnover (c) Receivables turnover (d) Book value per share  (e) Earnings per share (f) Debt to total assets

  When can restructuring be seen as a positive corporate

when can restructuring be seen as a positive corporate strategic move? explain how shareholder value is created through

  What will be the market price of the security

The market price of a security is $45. Its expected rate of return is 14.2%. The risk-free rate is 4% and the market risk premium is 7.6%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles ..

  Explain the following beneficiary designations

Explain the following beneficiary designations. a. Primary and contingent beneficiary

  Why do public utilities typically have capital structures

why do public utilities typically have capital structures with about 50 percent debt whereas major oil companies

  Te firms tax rate is 40the current price of the 12 coupon

assume that you are the assistant to the cfo of xyz company.nbsp your task is to estimate xyzs wacc using the following

  Learned throughout your finance courses

Should Bethesda Mining take the contract and open the mine?Please justify your recommendation using accepted finance concepts you learned throughout.

  In preparation for a visit with their insurance agent

Wendy and Frank Kampe, 30 and 35, are considering the purchase of life insurance. Wendy doesnAc€?ct have any coverage whereas Frank has a $150,000 group policy at work. The Kampes have two young children, ages 3 and 5.

  Determine the economic order per quantity

Knoxville Accountants LLP consumes 100,000 packets of plain copier paper yearly. The usage is roughly steady throughout the year. The carrying expenses of this inventory is $2.00 per unit average inventory per year.

  Large industries bonds sell for 106802 the bond life is 9

large industries bonds sell for 1068.02. the bond life is 9 years and the yield to maturity is 6.0. what must be the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd